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Hyper pricing for virtualization

Microsoft and VMware put the virtualization pricing war into hyper speed

If Bob Kelly wanted a fight on virtualization pricing, he’s got one. Microsoft‘s (NASDAQ: MSFT) server and tools group vice-president may have opened up a can of worms after announcing at the recently concluded Worldwide Partner Conference in Houston that Microsoft was cheaper than rival VMware (NYSE: VMW) by a third.

After the European Anti-Trust Federation mandated Microsoft to charge something for its Hyper-V, which comes with Windows Server, Microsoft priced it at $28.

And just last week, VMware said it will offer its small-footprint version of its ESX virtualization software for free, responding to pressure from Microsoft and other companies that are threatening VMware’s lead in the virtualization market.

With all this pricing, or non-pricing, confusion, CDN asked VMware, Microsoft and Citrix Systems (NASDAQ: CTXS) to submit pricing on a three-server SMB configuration.

The first to submit a price was VMware’s Eric Horschman. His pricing, which was given to CDN prior to the ESX pricing changes, showed that Microsoft was cheaper, but not by a third. It was $415 lower than VMware. It also showed that Citrix’ Xenserver costs more by more than $5,000 in comparison.

Dave Roussain, group vice-president of virtualization and management division for Citrix, disputed those prices because Xenserver Express has been free for 18 months. “VMware was just matching the market for hypervisor by making ESX free of charge,” he said.

Its standard edition is $900, so the total price for a three server SMB configuration would be approximately $2,700.

VMware is priced on a two socket server basis. A user needs one license for those two sockets and two licenses for four. XenServer and Windows Server with Hyper-V are priced on a per server basis.

Hyper-V System Center is $1,250 per server for virtual machine in a three server SMB configuration.

VMware is just under $3,000. Not exactly a third of the price, but close.

As of press time, Microsoft Canada was unable to provide or confirm this price on a three-server SMB configuration. The only price Microsoft told CDN was that Hyper-V costs $28.